294. Tenants Moved Out but Still Pay Rent? (Office Hours)

Key Takeaways:

Going "dark" in commercial real estate refers to when a tenant shuts down their business but is still legally obligated to pay rent. This can create opportunities for landlords to get properties at a discount.

When a tenant goes dark, the landlord has to weigh the pros and cons of suing the tenant versus negotiating an early lease termination. Lawsuits often end up costing more in legal fees than they are worth.

When releasing a dark property to a new tenant, it's important to negotiate a buyout deal with the existing tenant first before bringing in the new one, otherwise the landlord has less leverage.

For financing dark properties, there are lenders willing to work with these situations, but it will depend on the landlord's overall financial strength and the specifics of the lease.

Building relationships and a strong network in the commercial real estate industry is crucial, especially when transitioning from residential to commercial investing.